A prototype thesaurus in development offers synonyms based on the context of a word in a sentence rather than just the word itself.

Type "financial sector" in a word processor and the thesaurus suggests "financial system" and "financial industry," instead of synonyms for "financial" and "sector" separately. Or enter an entire sentence and Word will completely rewrite it.

"Investors are expecting details on the Treasury Department's plans to fix the financial industry"? Nah. How about, "Investors are awaiting information on the Treasury Department's program to overhaul the financial sector"?

The prototype thesaurus was one of about 40 research projects Microsoft presented Tuesday during the first day of its weeklong TechFest in Redmond.

Sponsored annually by Microsoft's computer research arm, TechFest is the company's science fair for adults.

On Tuesday morning, researchers stood in front of poster boards (and computers, of course) showing off their latest projects as reporters and colleagues from around the world grilled them.

None of the projects has been released to the public, and many never will be.

"They may or may not have applications today but may have in two or three years," said Rick Rashid, the senior vice president who oversees Microsoft Research.

Craig Mundie, Microsoft's chief research and strategy officer, said research and development are particularly important given the global economic crisis.

"The companies that fared best (in past downturns) one, responded with cost containment, and two, continued to invest in product development," he said.

"The company would struggle to survive and prosper if we did not have research investment."

The projects Microsoft researchers unveiled Tuesday ranged from the trivial to the impressive.

Want to listen to one of the 10,000 songs on your media player, which is connected to the system? Say the title out loud. Can't remember the title? Simply state a key word. Alternate uses: Find a topic in the owner's manual of your car or reply to a text message orally.

Researchers from Microsoft Research offices in Beijing, China, demonstrated a method of writing in the air, with the invisible text immediately transferred to a PC.

A webcam captures a character when a user traces it in the air with any colored object. The computer recognizes the character and then asks the user whether it has chosen the correct one.

Lei Ma said that it might be useful in the Xbox video game console, avoiding the need to enter text with a controller.

Ayman Kahleel of Microsoft's offices in Egypt showed how a system could string together mobile videos in real time.

The vision: At a sports event or political rally, thousands of people could shoot video from their cell phones. The videos could be streamed to a central server. There, the Microsoft technology would mesh it together creating a live video panorama for others to watch at home.

For now, the project works with at most three cell phones.

Another project on display at TechFest involved a computer that could analyze what was standing in front of it and then interact with it.

The example tracked a series of references -- an individual's clothes, what the person is looking at, and what the individual is saying -- and then behaves accordingly.

Potentially, the system could be used as a front desk assistant.

Why the need to take note of the person's clothes? Well, if someone is at a Microsoft front desk with a tie and jacket, they're probably a visitor -- and should be treated like one, said Microsoft's Dan Bohus.